Energy regulator Ofgem will now monitor their commitment, with the money being invested over three years.

Mr Hutton: "This is a significant boost to the billions already spent by government and the energy companies and means we can now get this vital extra support to the people who really need it in time for the coldest months this coming winter."

The deal is part of the government's commitment to alleviating fuel poverty and follows Alistair Darling's pledge to increase the winter fuel allowance, announced in last month's Budget.

Mr Darling had also pledged the government would secured additional support for the poorest households.

Mr Hutton concluded: "I do not underestimate the difficulties and anxiety that rising energy prices can cause but I believe that this extra cash, coupled with ensuring we have the most competitive market possible, will help us toward our goal of eradicating fuel poverty in the UK."